United States District Court, D. Colorado
GARY L. HAYNES, for and on behalf of the Insurance Trust of trustee Marjorie Unger, Plaintiff,
TRANSAMERICA CORPORATION, a member of Aegon Group, doing business as Transamerica Life Insurance Company, Defendant.
Kristen L. Mix United States Magistrate Judge
matter is before the Court on Defendant's Motion
for Summary Judgment [#64] (the “Motion”).
Plaintiff filed a Response [#70] in opposition to the Motion,
and Defendant filed a Reply [#73]. The Court has reviewed the
Motion, the Response, the Reply, the attached exhibits,
entire case file, and the applicable law, and is sufficiently
advised in the premises. For the reasons set forth below, the
Motion [#64] is GRANTED.
Summary of the Case
details underlying the claims in this case are not relevant
to resolution of the present Motion [#64]. In short, however,
Plaintiff, as purported trustee of an insurance trust (the
“Trust”) established by Marjorie Ann Unger
(“Ms. Unger”), asserts three claims seeking
damages from Defendant, the insurer: (1) breach of contract,
(2) common law bad faith, and (3) unjust enrichment. See
Am. Compl. [#33].
Standard of Review
purpose of a motion for summary judgment pursuant to
Fed.R.Civ.P. 56 is to assess whether trial is necessary.
See Celotex Corp. v. Catrett, 477 U.S. 317, 323
(1986). Pursuant to Fed.R.Civ.P. 56(c), summary judgment
shall be granted if “the pleadings, the discovery and
disclosure materials on file, and any affidavits show that
there is no genuine issue as to any material fact and that
the movant is entitled to judgment as a matter of law.”
An issue is genuine if the evidence is such that a reasonable
trier of fact could resolve the issue in favor of the
nonmoving party. Anderson v. Liberty Lobby, 477 U.S.
242, 248 (1986). A fact is material if it might affect the
outcome of the case under the governing substantive law.
burden is on the movant to show the absence of a genuine
issue of material fact. Adler v. Wal-Mart Stores,
Inc., 144 F.3d 664, 670-71 (10th Cir. 1998) (citing
Celotex, 477 U.S. at 323). When the movant does not
bear the ultimate burden of persuasion at trial, the
“movant may make its prima facie demonstration [of the
absence of a genuine issue of material fact] simply by
pointing out to the [C]ourt a lack of evidence for the
nonmovant on an essential element of the nonmovant's
claim.” Id. at 671. If the movant carries the
initial burden of making a prima facie showing of a lack of
evidence, the burden shifts to the nonmovant to put forth
sufficient evidence for each essential element of his claim
such that a reasonable trier of fact could find in his favor.
See Liberty Lobby, 477 U.S. at 248; Simms v.
Okla. ex rel. Dep't of Mental Health & Substance
Abuse Servs., 165 F.3d 1321, 1326 (10th Cir. 1999). The
nonmoving party must show the existence of a genuine dispute
of a material issue by going beyond the allegations in its
pleading and providing “specific facts showing there is
a genuine issue for trial.” Celotex, 477 U.S.
at 324. To satisfy its burden of providing specific facts,
the nonmoving party must tender affidavits or other competent
evidence. Concrete Works, Inc. v. City & Cty. of
Denver, 36 F.3d 1513, 1517 (10th Cir. 1994). However,
“[w]hen opposing parties tell two different stories,
one of which is blatantly contradicted by the record, so that
no reasonable jury could believe it, a court should not adopt
that version of the facts for purposes of ruling on a motion
for summary judgment.” Scott v. Harris, 550
U.S. 372, 380 (2007); Thomson v. Salt Lake Cty., 584
F.3d 1304, 1312 (10th Cir. 2009). Conclusory statements based
merely on conjecture, speculation, or subjective belief are
not competent summary judgment evidence. Bones v.
Honeywell Int'l, Inc., 366 F.3d 869, 875 (10th Cir.
2004). The nonmoving party's evidence must be more than
“mere reargument of [his] case or a denial of an
opponent's allegation” or it will be disregarded.
See 10B Charles Alan Wright et al., Federal
Practice and Procedure § 2738 at 356 (3d ed. 1998).
argues that Plaintiff has failed to demonstrate standing to
pursue this lawsuit on behalf of the Trust. Motion
[#64] at 7-8; Reply [#73] at 3-5. Pursuant to
Article III of the United States Constitution, federal courts
have jurisdiction to hear only particular cases and
controversies. Colo. Outfitters Ass'n v.
Hickenlooper, 823 F.3d 537, 543 (10th Cir. 2016) (citing
Susan B. Anthony List v. Driehaus, 134 S.Ct. 2334,
2341 (2014)). “To satisfy Article III's
case-or-controversy requirement, a plaintiff must demonstrate
standing to sue by establishing (1) an injury in fact, (2) a
sufficient causal connection between the injury and the
conduct complained of, and (3) a likel[ihood] that the injury
will be redressed by a favorable decision.”
Id. (internal quotation marks omitted).
federal court can't ‘assume' a plaintiff has
demonstrated Article III standing in order to proceed to the
merits of the underlying claim, regardless of the claim's
significance.” Colo. Outfitters Ass'n, 823
F.3d 537, 543 (citing Steel Co. v. Citizens for a Better
Env't, 523 U.S. 83, 94 (1998)). “[T]he
elements of standing ‘are not mere pleading
requirements but rather an indispensable part of the
plaintiff's case.'” Colo. Outfitters
Ass'n, 823 F.3d 537, 544 (quoting Lujan v.
Defenders of Wildlife, 504 U.S. 555, 561 (1992)).
Therefore, “each element must be supported in the same
way as any other matter on which the plaintiff bears the
burden of proof, i.e., with the manner and degree of evidence
required at the successive stages of the litigation.”
relevant here, pursuant to Fed.R.Civ.P. 17(b)(3),
“[c]apacity to sue or be sued is determined . . . by
the law of the state where the court is located . . .
.” Under Colorado law,  a “fiduciary” is
defined as “one or more persons designated in a will,
trust instrument, or otherwise, whether corporate or natural
persons and including successors and substitutes, who are
acting in any of the following capacities: . . . (IV)
Trustees.” Colo. Rev. Stat. § 15-1-802(3)(a).
“During the period of administration of the . . . trust
and until final distribution, a [trustee] has the power to
perform, without court authorization, every act reasonably
necessary to administer . . . the trust . . . .” Colo.
Rev. Stat. § 15-1-804(1). This includes the power
“[t]o pay, contest, or otherwise settle claims by or
against the . . . trust, including taxes, assessments, and
expenses, by compromise, arbitration, or otherwise . . .
.” Colo. Rev. Stat. § 15-1-804(2)(r).
appears to be no dispute that John Unger (“Mr. Unger)
is the only trustee actually named in the Trust agreement.
See Motion [#64] at 8; Response [#70] at
1-2. The dispute here is whether Plaintiff, Gary L. Haynes,
despite not being formally named as a trustee on the Trust,
may still act on behalf of Trust with respect to litigating
the Trust's claims in this lawsuit. Motion [#64]
at 8. The Court first considers whether Plaintiff has
provided evidence demonstrating that he was, in fact, a
formal trustee of the Trust. See Colo. Outfitters
Ass'n, 823 F.3d at 544 (stating that Plaintiff bears
the burden of proof on standing).
states, without citation, that “[b]oth the insured Mrs.
Unger and her son John Unger gave powers of attorneys
allowing Mr. Haynes to act as trustee for the trust.”
Response [#70] at 1; see also Id. at 2
(stating, without citation, that “Mrs. and Mr. Unger
gave a power of attorney for Mr. Haynes to act”).
Plaintiff further avers, without citation, that “[t]he
powers of attorney were intended to give Mr. Haynes the full
authority to manage the trust including working with
Defendant.” Id. at 2. Plaintiff also states:
“Attached is the copy of the [sic] notifying the
Defendant of the fact that Mr. Unger appointed Mr. Haynes as
the acting trustee, attached hereto is Power of
Attorney.” Id. However, Plaintiff does not
cite to a specific exhibit containing this Power of Attorney,
and the Court has not discovered this document among
Plaintiff's exhibits as a result of its own review of the
record. Plaintiff later states, again without
citation, that “[b]ecause Mr. Unger could not be
available he transferred the trustee duties to Mr.
Haynes.” Response [#70] at 6. Plaintiff also
states, without citation, that: “It is not a correct
statement of fact to state that there was no notice that Mr.
Unger wanted to appoint Mr. Haynes.” Id. at 7.
Plaintiff notes, without citation, that “[i]n 2011
attempts were made to change the trustee's name.”
Id. at 8. However, Plaintiff concedes, without
citation, that “Defendant would not recognize the
change or accept the use of a power of attorney.”
on this recitation, there appears to be utterly no evidence,
and certainly no evidence properly brought to the Court's
attention, that Plaintiff was ever formally added to the
Trust as trustee or otherwise formally empowered to act on
behalf of Mr. Unger, who was undisputedly formally named as
the trustee of the Trust. Thus, the Court finds that there is
no genuine issue of material fact on this issue and that
Plaintiff has not met his burden of demonstrating that he
was, in fact, a formal trustee of the Trust. See Colo.
Outfitters Ass'n, 823 F.3d at 544.
Court next turns to consideration of whether Plaintiff has
provided evidence that he was a de facto trustee of the
Trust. Neither party suggests a standard which the Court
should use to determine whether Plaintiff was a de facto
trustee. No Colorado state court nor federal district court
within the Tenth Circuit appears to have enunciated a test
for determining whether a person may legally be deemed a de
facto trustee, although these courts have offered their tacit
approval of de facto trustees in various contexts. See,
e.g., City of Pueblo v. Grand Carniolian Slovenian
Catholic Union of the U.S. of Am., 358 P.2d 13, 16
(Colo. 1960); In re Woods, 215 B.R. 623, 627 (10th
Cir. 1998) (citing In re Holiday Isles, Ltd., 29
B.R. 827, 829 (Bankr. S.D. Fla. 1983) (stating that
“[c]ourts faced with a trustee's failure to
technically qualify have long recognized the concept of a
‘de facto' trustee of a bankrupt estate”);
Shackelford v. Lake, No. CIV-15-0218-HE, 2016 WL
6993960, at *5 (W.D. Okla. Nov. 29, 2016) (“As his
mother's attorney-in-fact, as the manager of the LLC, and
as de facto trustee of her trust-like device, Mr. Shackleford
[sic] clearly owed his mother fiduciary
responsibilities.” (internal citation and footnotes
omitted)); United States v. Novotny, No. 99-D-2196,
2001 WL 1673628, at *3 (D. Colo. Nov. 8, 2001)
(“Novotny and his wife have served as appointed or de
facto trustees during the entire existence of the
Trusts.”); Yeast v. Pru, 292 F. 598, 603
(D.N.M. 1923) (“Therefore these trustees, if not de
jure, were unquestionably de facto, trustees of the
respective towns they assumed to represent and act for as
absence of any relevant guidance from the State of Colorado
or the Tenth Circuit federal courts regarding the standard
for determining a de facto trustee, the Court turns to the
standards enunciated by these courts for determining de facto
status in other contexts, i.e., corporate and governmental
actors. These standards are materially similar.In the
corporate context, “[a] de facto officer is defined as
one who, under color of authority, exercises a corporate
office.” Kuehn v. Kuehn, 642 P.2d 524, 526
(Colo.App. 1981). “The underlying policy for the
doctrine of de facto officers is the protection of the
interests of the public and individuals dealing with such
‘officers.'” Id. In Kuehn v.
Kuehn, 642 P.2d at 526, the Colorado Court of Appeals
held that “[b]y clothing [the defendant] with the
indicia of a corporate officer through the power of attorney,
the assignment, and the quitclaim deed, [the plaintiff] gave
[the defendant] de facto officer status.”
People v. Sherrod, 204 P.3d 466, 471-72 (Colo.
2009), the Colorado Supreme Court thoroughly explained the de
facto doctrine in the context of public employment:
The situation now before us, where an irregularity exists in
an otherwise qualified county judge's authority to act as
a district judge, is analogous to cases of de facto officers.
“The de facto officer doctrine confers validity upon
acts performed by a person acting under the color of official
title even though it is later discovered that the legality of
that person's appointment or election to office is
deficient.” Ryder v. United States, 515 U.S.
177, 180, 115 S.Ct. 2031, 132 L.Ed.2d 136 (1995); see
also McDowell v. United States, 159 U.S. 596, 601-02, 16
S.Ct. 111, 40 L.Ed. 271 (1895) (“[T]he rule is well
settled that where there is an office to be filled, and one,
acting under color of authority, fills the office and
discharges its duties, his actions are those of an officer de
facto, and binding upon the public.”). According to the
United States Supreme Court,
The de facto doctrine springs from the fear of the chaos that
would result from multiple and repetitious suits challenging
every action taken by every official whose claim to office
could be open to question, and seeks to protect the public by
insuring the orderly ...